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Stifel Taps Nvidia and AMD as Top Chip Picks Ahead of Earnings
Investment firm Stifel has identified Nvidia (NVDA) and Advanced Micro Devices (AMD) as its top picks in the processor sector ahead of the upcoming earnings season. The firm's analysis highlights the sustained, strong demand for artificial intelligence infrastructure from a broadening set of customers.
Nvidia: Preferred Large-Cap Play
Stifel named Nvidia as its preferred large-cap processor stock, anticipating continued momentum from its Blackwell platform and early orders for the next-generation Vera Rubin architecture. The firm views the current market as supply-constrained rather than demand-constrained, as compute capacity remains tight.
According to Stifel's note, key factors supporting its outlook on Nvidia include:
- An expanding customer base beyond traditional hyperscalers to include AI clouds, enterprises, and sovereign buyers.
- Management commentary that has addressed concerns about product transition timing.
- An attractive valuation, with the stock trading at approximately 25 times fiscal year 2028 estimates.
AdThe note also pointed to recent positive developments, including Morgan Stanley and TD Cowen reiterating positive ratings on the company.
AMD: Accelerated Computing Exposure
Stifel selected AMD as its other preferred choice for investors seeking exposure to the accelerated computing market. The firm emphasized that AMD's core EPYC server-CPU business is increasingly benefiting from AI adoption, with its total addressable market projected to exceed $120 billion by 2030.
Company-specific catalysts for AMD include its second-half product cadence for the MI450 and Helios platforms, supported by significant commitments from OpenAI and Meta. Stifel also suggested that an early-July stock pullback has reset investor expectations for the MI450 ramp. The firm sees AMD's upcoming "Advancing AI" event on July 23 as a potential positive catalyst ahead of its earnings report.